It seems that we will lose whatever benefits we should have accrued from our oil revenue
Dear Editor,
The reaction of the Coalition to the advice of the US Ambassador Perry Holloway is markedly indicative that we will stand to lose our dreams of becoming a wealthy nation given our vast oil discovery. This began with the signing of the lop-sided Exxon PSA. The advisory was simply meant to salvage the situation since the Ambassador, being equipped with a wealth of experience, fully understands the ensuing corruption and the debilitating nature of the oil curse. Therefore, he advised that the Sovereign Wealth Fund be ‘independent, nonpartisan, transparent and inviolable’.
He also warned that a ‘rainy day fund’ was not enough to secure the country’s future transformation. He further advised that such a Fund would realise investments in education, health, infrastructure, agriculture and security. What is wrong with these suggestions? Has he inadvertently struck at the true intentions of the Government to misuse the Fund? Was it a guilt reaction? It is now common knowledge that each and every ministry within this Government is marred by corrupt practices such as cronyism, political patronage, mismanagement, squandermania and downright diversion of funds. The $18 million Exxon signing bonus is still fresh in our minds and if it was not for Mr. Christopher Ram and the Opposition Leader, Bharrat Jagdeo, this would have found its way into the accounts of some politicians within the Coalition. (The unrelenting resultant exposure by the media must be commended as well.) The Ambassador has pointed out some salient characteristics of such a Fund and Guyanese should ensure that those criteria are stringently met.
Furthermore, the Opposition Leader is quite correct in his conclusion that the Coalition’s response to the Ambassador’s advice can be described as ‘petulant ramblings’ and that the Government is ‘too thin skinned’. He then went on to describe an innate characteristic of disregarding the voice of the people, which has been arrogantly displayed almost on a daily basis on various issues but more pronounced as it regards the Exxon’s PSA. He said that the Coalition ‘continues to be impervious to suggestions, a disposition that does not bode well for the Nation’. We have seen many examples of this since the Coalition took Office.
The Opposition Leader also went at length to stress that a Sovereign Wealth Fund ‘is quintessential to the future prosperity of our Nation’. An apt illustration is Equatorial Guinea where Exxon has been pumping millions of dollars into the private bank accounts of selected members of the Government. This country is the richest country in Africa yet a little less than half the population has access to drinking water, 20% children die before attaining the age of 5 years and most people live on a meager US$ 2 per day. In contrast, the members of the Government live extravagantly lavish lifestyles! Therefore, the squandering of our oil money is not an impossible feat when we consider that just a few months after getting into Government, the Ministers paid to themselves a shamelessly hefty 50% increase in salary.
Why the importance of independence of the SWF? The Sovereign Wealth Fund Institute developed a transparency index called the Linaburg-Maduell Transparency Index, which is made up of 10 basic principles equivalent to 10 points on the Index. It deals with reason for the Fund’s creation, the need for up-to-date independently audited reports and guidelines for ethical standards, investment policies and enforcer guidelines among others.
The Institute recommends that a country gets a minimum rating of 8 points in order to claim adequate transparency. Our neighbor Trinidad and Tobago has a fund of US$5.5 billion and ranked 8th on the Index while Equatorial Guinea has a Fund of just US$80 million and has no ranking on the Index. This tells a sad story for a country, which established a SWF but yet, lacks the minimum essential points on the Transparency Index. On the other hand, Norway ranks 10thon the Transparency Index. Therefore, though this Government is ranting about the establishment of an SWF, it must be done as advised by the US Ambassador and the Leader of the Opposition, Dr. BharratJagdeo to ensure that Guyana gets a minimum ranking of 8th on the Index. It is imperative that the Opposition be consulted on the establishment of this Fund or else this Nation loses!
We have been denied the right to a renegotiation of the Exxon Contract and it seems that we will be losing whatever benefits we should have accrued from our oil revenue given this Government’s revulsion for transparency and accountability.
Haseef Yusuf
RDC Councillor
